2013 'Poison Pill' Plan Defended By Murdoch

June 5, 2013

'Poison Pill' Plan Defended By Murdoch

From The Age — News Corp executive chairman Rupert Murdoch has defended the use of a "poison pill" to stave off a hostile acquisition, insisting the use of the mechanism was quite common in the United States.

The comments were made to analysts as part of the Australian leg of an investor roadshow over the looming split of the global media company's newspaper and publishing business from its entertainment assets this month.

In preparing for the split, News Corp has added a provision to allow shareholders to ward off a hostile takeover. Each share of the new publishing company will include a right to purchase ($186) worth of stock for , triggered when any investor acquires 15 per cent or more of the voting shares.

"I know it's uncommon in this country, but it's very common in America in these situations," Mr Murdoch said of the defensive instrument dubbed a poison pill.

The new publishing company, which will retain the News Corp name, kicks off on June 28 with properties such as The Wall Street Journal, The Times, Australian pay TV and newspapers, The Daily Telegraph and the Herald Sun.

News' fast-growing TV and film assets will called 21st Century Fox.

Mr Murdoch will be chairman and chief executive of 21st Century Fox and executive chairman of the new News Corp. His children, James and Lachlan, will be on both boards.

Wednesday's briefing follows a similar investor day held in New York last week. News says it's splitting the publishing company from its TV and movie business to take advantage of the shift away from print to digital content.

While not committing to a dividend for the new publishing company, Mr Murdoch said there were likely to be "significant movements" in the dividend as the cash flow of the publishing company grew. But he said Australian investors needed to look at the company as a growth stock rather than a yield play.